The knowledge economy has never been more accessible and profitable. You don’t need to be a university professor to share your expertise and earn from it. Whether you are a fitness instructor selling workout programs, a programmer teaching others to code, or a marketer hosting paid webinars, the internet gives you direct access to a global audience.
With the help of platforms like Teachable, Udemy, Kajabi, or even a simple WordPress integration, you can package your knowledge and sell it 24/7. This is the dream of passive income. But when the first sales start hitting your bank account or Stripe dashboard, the inevitable question arises: What does the state think about all this?
Many digital product creators live under the illusion that selling knowledge online isn’t a „real business“ because there is no physical warehouse or logistics. However, for the National Revenue Agency (NRA) and European tax regulators, selling online courses and webinars is a fully real, strictly regulated commercial activity that hides specific VAT traps.
In this comprehensive article, we will examine absolutely all accounting and tax aspects of selling digital knowledge. You will learn whether you need a company, how to account for copyrights, how live webinars are taxed compared to pre-recorded courses, and how to structure your business to avoid fines.
1. The Fundamental Question: Do you need a company to sell courses?
The shortest answer is: No, the law does not require you to have a registered company (LLC/EOOD) to start teaching and selling courses online. You can launch and operate completely legally as a private individual practicing a freelance profession.
The choice between a freelance profession and a company is not a matter of state permission, but of tax optimization and math. Let’s look at both options in detail.
Option A: Working as a Freelancer (Private Individual)
If you choose this path, you declare that you provide services through your personal labor and expertise. To be compliant, you must register in the BULSTAT register within 7 days of starting your activity. Read more on this procedure in The essentials for registering and accounting as a freelancer.
Taxes and Expenses: As a freelancer, you pay a 10% flat tax on your income. The huge advantage here is the presence of „statutory recognized expenses“. For standard services, these are 25%. This means if you sell courses for 10,000 euros, the state assumes you had 2,500 euros in expenses (without asking for invoices). You pay a 10% tax only on the remaining 7,500 euros, making your real tax burden 7.5%.
Social Security: This is what worries most people. As a self-insured individual, you owe social and health security. The minimum insurable income for 2026 is 620.20 euros. You owe about 27.8% on this amount every month (around 172 euros).
- Important exception: If you work full-time in a corporate company and your employer insures you at the maximum threshold (2,300 euros for 2026), you are exempt from paying additional social security for your freelance activity.
Option B: Company Registration (LLC/EOOD)
When your sales increase and you begin investing serious funds into business infrastructure (expensive filming gear, software subscriptions for thousands of euros, massive Facebook ads budgets), registering an LLC becomes the more logical and cheaper choice.
Taxes and Expenses: With a company, there are no statutory recognized expenses. Everything is based on real, documented expenses. You pay a 10% corporate tax on your net profit. If you sold courses for 10,000 euros but have invoices for ads and software worth 6,000 euros, your profit is 4,000 euros. Your tax will be 400 euros. If you want to withdraw these 3,600 euros for personal needs, you must distribute a dividend, which carries an additional 5% tax.
2. The Magic of Copyrights: How to cut your taxes in half
There is a specific loophole in the law that course creators often miss, which can save them thousands of euros. This is the concept of copyrights.
If your online course is a unique work bearing your creative and intellectual imprint (you wrote a script, filmed original video, created a unique methodology), this course can be classified as an object of copyright.
Why is this important? If you work as a private individual (freelancer) and sell access to copyrighted content, the Personal Income Tax Act grants you not 25%, but 40% statutory recognized expenses! This means if you sell copyright courses for 10,000 euros, the state accepts you have 4,000 euros in expenses. You will pay a 10% tax only on the remaining 6,000 euros. Your real tax burden drops to just 6% of the gross revenue. To utilize this, you need flawless contracts and Terms & Conditions explicitly stating that you are granting the right to use your copyrighted work.
3. The Huge Difference: Recorded Course vs. Live Webinar
Here we enter one of the most complex areas of European tax legislation. What exactly are you selling – an „electronic service“ or a „standard service“?
According to EU VAT directives, there is a fundamental difference between selling access to pre-recorded videos and hosting a live training (webinar) via Zoom.
Scenario 1: Pre-recorded online course (Electronic service) If a client pays with a card on your site and instantly gets automated access to recorded videos and PDFs without your real-time intervention, this is an „electronically supplied service“. For electronic services sold to consumers (B2C) in the EU, VAT is owed in the country where the customer is located!
- If a German client buys your course, you must charge them 19% German VAT.
- If a French client buys it, you charge 20% French VAT.
To avoid registering for VAT in every single EU country, the EU created the OSS (One Stop Shop) system. If your B2C sales of electronic services in the EU exceed the 10,000 euro threshold for the year, you must register for OSS in Bulgaria. For general VAT limits, see When to Register for VAT? New Thresholds and Business Advantages in the Eurozone.
Scenario 2: Live Webinar (Standard service) If you host a live masterclass via Zoom, answer questions in real-time, and lead discussions, human intervention is dominant. This is NOT an electronic service, but a standard educational service. In this case, the rules differ. If you are not VAT registered in Bulgaria, you do not charge VAT to your end clients from the EU until you reach the national mandatory VAT registration threshold.
4. Foreign Platforms and the VAT Trap (Art. 97a)
Many creators choose not to build their own site and upload their courses to global platforms like Udemy, Teachable, or Patreon. These platforms are legal entities based outside Bulgaria. When they pay you your share of sales, you are providing them a service, or conversely – they charge you a fee (commission) to use their infrastructure.
According to the Bulgarian VAT Act (Art. 97a), when a Bulgarian entity (even a freelancer) receives or provides services to a company outside Bulgaria, it is subject to mandatory special VAT registration BEFORE receiving the first income or paying the first fee. Missing this deadline carries fines starting at over 250 euros.
5. Payments: Do I need a cash register?
If you sell courses on your own site and integrate a card payment system like Stripe or PayPal, we have good news. Because payments are entirely cashless, the law exempts you from needing a physical cash register (fiscal device).
To be fully legal, you must use the Alternative Reporting Method for online stores. This requires your site to generate an electronic receipt/invoice upon payment, send it to the client, and you must submit a specialized XML audit file to the NRA monthly. If this sounds complex, see how digitalization helps in What Is an Electronic Invoice and Why It’s the Future of Accounting.
6. Meta and Google Ad Expenses
No online course sells itself. You will invest in Facebook (Meta), Instagram, or Google Ads. Just like with course platforms, these ad networks are based in Ireland. Buying ads from them requires the exact same VAT registration under Art. 97a. Entering your bank card into Facebook Ads without an active VAT number violates the law.
Conclusion and Action Plan
Selling online courses and webinars is highly scalable. To keep it sustainable:
- Choose a legal form: Start as a freelancer if expenses are low. Open an LLC if you plan high ad budgets.
- Consult on copyrights: Aim to classify your course as copyrighted to use 40% recognized expenses.
- Register for VAT (Art. 97a): Do this BEFORE paying for your first Facebook ad or uploading to a foreign platform.
- Monitor EU limits (OSS): Watch the 10,000 euro threshold for automated courses.
- Automate invoices: Use software that issues electronic invoices via Stripe to avoid cash registers.
Creating high-quality educational content takes enough energy as it is. Don’t let accounting chaos distract you from your main goal – changing lives through your knowledge.
